A growing inventory of orphaned wells could cost the state of Texas more than $150 million to plug.
According to the AP, Texas could be facing up to $165 million in costs to plug nearly 10,000 abandoned wells.
That inventory could swell to as high as 12,000 as upstream companies continue to shelve projects and more firms head into bankruptcy, the AP said.
Low oil prices have prompted more than 50 firms to file for bankruptcy since 2014, boosting the state’s inventory of abandoned wells.
A Deloitte report published in February found that nearly 35 percent of pure-play exploration and production firms listed worldwide, or about 175 companies, are at a “high risk” for insolvency.
Thirty-five U.S. E&P firms with cumulative debt of under $18 billion filed for bankruptcy protection from July 2014 to December 2015, according to the report.
The prolonged oil price downturn and the large number of wells operated by shale-focused firms are adding to the woes in major producing states.
“It’s the magnitude because this bust is so deep. In Wyoming they had a single operator walk away, and instead of it being 5, 10, 20 wells, it was 150,” Bruce Baizel of environmentalist group Earthworks told the AP.
Trinity Mineral Management managing partner Trey Scott told the news agency that Texas could be facing an average cost of $17,000 per orphaned well.
According to Baker Hughes, Texas saw its rig count climb by 13 to 191 rigs last week, down from 363 rigs a year ago.
The total U.S. rig count posted its first double digit gain of the year last week after a 10 rig gain pushed the count up to 424 rigs.